BÀI GIẢNG kế TOÁN QUỐC tế chapter 13 provisions and contingencies

Chapter 13

PROVISIONS AND
CONTINGENCIES


Learning Objectives
1. IAS 37

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IAS 37
•Provision
A liability of uncertain timing or amount
•Liability
An obligation of an entity to transfer
economic benefits as a result of past
transactions or events
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IAS 37
Constructive obligation
• An obligation that derives from an entity’s actions
where:
• By an established pattern of past practice,
published policies or a sufficiently specific current
statement the entity has indicated to other parties
that it will accept certain responsibilities.
• As a result, the entity has created a valid

expectation on the part of those other parties that
it will discharge those responsibilities.
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IAS 37
•Important
The amount recognised as a provision should be
the best estimate of the expenditure required to
settle that present obligation.

•Restructuring
A programme planned and controlled by
management Materially changes scope of
business and/or the way the business is conducted

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IAS 37

6


IAS 37
• Note. Restructuring is not usually triggered
by a management decision alone. Other
events, such as negotiations with
employee representatives, need to take
place.

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IAS 37
Contingent Liability
• A possible obligation that arises from past
events, whose existence will be confirmed by
the occurrence or non-occurrence of future
events not wholly in the entity’s control.
• A present obligation not recognised because:
– It is not probable that settlement of the
obligation will be required
– The amount cannot be measured.
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IAS 37
Contingent Asset
A possible asset that arises from past events
and whose existence will be confirmed by
the occurrence of one or more uncertain
future events not wholly within the entity’s
control.

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